Free Montana Property Practice Test — LicenseIQ

Question 1

A property is assessed at $280,000 and the tax rate is 22 mills. What is the annual tax?

Accepted Answer

1 mill = $1 per $1,000. $280,000 / 1,000 = 280; 280 x 22 = $6,160.

Question 2

An agent signs a contract to sell real property on behalf of the owner. Under MCA 28-2-903, for the contract to bind the owner:

Accepted Answer

MCA 28-2-903(1)(d) provides that when an agent makes a sale or long-lease agreement, the agent's authority must be in writing and subscribed by the party to be charged.

Question 3

An owner of lakefront property holds:

Accepted Answer

Littoral rights apply to properties abutting standing bodies of water such as lakes and oceans. (Reclassified from section 16 to section 1 / CORE.)

Question 4

A deed that conveys only whatever interest the grantor has, with no warranties, is a:

Accepted Answer

A quitclaim deed conveys the grantor's interest, if any, with no warranties - often used to clear clouds on title.

Question 5

A property manager owes fiduciary duties primarily to the:

Accepted Answer

The property manager is the owner's (general) agent and owes fiduciary duties to the owner, while dealing honestly with tenants.

Question 6

An unlicensed person holds a power of attorney and sells property for an out-of-state owner once, without a fee. Later he begins doing this regularly for several owners for a fee. Which statement is correct?

Accepted Answer

MCA 37-51-103(1)(b) exempts an attorney-in-fact under a power of attorney, unless the person does it regularly or consistently for others for a fee or to evade licensing. The exemption fails once the activity becomes a paid business.

Question 7

The periodic report a property manager gives the owner showing rents and other income collected and expenses paid for the period is the:

Accepted Answer

The income statement (P&L) summarizes income and expenses for the accounting period, typically monthly.

Question 8

Under Montana's Small Tract Financing Act, a trust indenture may be used to secure property of not more than:

Accepted Answer

MCA 71-1-304 limits trust indentures under the act to real property not exceeding 40 acres.

Question 9

A life estate is measured by:

Accepted Answer

A life estate lasts for the duration of a specified person's life, then passes to the remainderman or reverts to the grantor. A fixed term describes an estate for years (a leasehold).

Question 10

Recording a deed in the county records primarily serves to:

Accepted Answer

Recording provides public (constructive) notice, protecting the owner's interest against later claims.

Question 11

Which item would most likely be considered personal property rather than a fixture?

Accepted Answer

Items easily removed without damage, like a plug-in refrigerator, are usually personal property. Carpeting cut to fit, built-ins and HVAC are adapted or attached fixtures.

Question 12

A licensee may manage property for an owner for a fee only if there is:

Accepted Answer

Property management agreements must be written and signed; they make the manager a general agent and define duties, authority and fees.

Question 13

A special warranty deed warrants title only against defects that:

Accepted Answer

Special (limited) warranty deeds protect only against problems created during the grantor's ownership; general warranty deeds cover the entire history.

Question 14

A commercial property has potential gross income of $240,000 and an 8% vacancy allowance. Using a gross income multiplier of 6, what is the estimated value?

Accepted Answer

EGI = $240,000 - 8% = $220,800; value = $220,800 x 6 = $1,324,800.

Question 15

In a deed, the party conveying title is the ____ and the party receiving title is the ____.

Accepted Answer

The seller (grantor) conveys to the buyer (grantee). A deed is the document; title is the ownership rights it transfers.

Question 16

A neighbor's new garage extends two feet over the property line. This is an:

Accepted Answer

An encroachment is an improvement that intrudes onto another's land; a survey establishes the boundary.

Question 17

Under Board rules, a Montana licensee who contacts an owner seeking information about the owner's property must:

Accepted Answer

ARM 24.210.641 makes it unprofessional conduct to fail to disclose licensee status when first seeking information about a property, and to fail to disclose licensee identity at first contact.

Question 18

Which person may sell Montana real estate for another without a real estate license?

Accepted Answer

MCA 37-51-103 exempts executors, administrators, receivers, and trustees. Collecting a fee for finding buyers or tenants for others, or advertising such services, is broker activity under 37-51-102.

Question 19

Marketable title means title that is:

Accepted Answer

Marketable title is reasonably free from defects and insurable - not necessarily perfect.

Question 20

In real estate, the accessibility requirements of the Americans with Disabilities Act apply mainly to:

Accepted Answer

The ADA's accessibility rules primarily cover public accommodations and commercial facilities; housing accessibility is governed mainly by the Fair Housing Act.

Question 21

Which statement correctly describes a Montana seller agent's duty to a buyer regarding property condition?

Accepted Answer

MCA 37-51-313(3)(a) requires disclosure of known adverse material facts and states the agent need not inspect the property or verify the seller's statements. A seller agent does owe the buyer limited duties, so 'disclose nothing' is wrong.

Question 22

Under Board rule, every Montana real estate advertisement must:

Accepted Answer

ARM 24.210.641 makes it unprofessional to fail to disclose the licensee's name or that the ad is from a licensee or brokerage. Internet ads need only the city, town, or county, not a street address.

Question 23

Under Montana's Unit Ownership Act, an amendment to a condominium's bylaws requires approval of:

Accepted Answer

MCA 70-23-307 requires 75% of the unit owners to approve a bylaw amendment, which takes effect when the certified copy is recorded.

Question 24

A Montana salesperson wants to buy a property she has listed for a client. Which arrangement is prohibited by Board rule?

Accepted Answer

ARM 24.210.641 prohibits acting as a seller agent when the licensee is the buyer and prohibits dual agency when the licensee is a principal. Disclosure and attorney advice are appropriate steps, not violations.

Question 25

When must Montana's statutory radon disclosure statement be provided in the sale of inhabitable property?

Accepted Answer

MCA 75-3-606 requires at least one document signed before or at the time of the offer to include the radon statement, whether or not testing occurred. Test results, if known, must also be provided.

Montana real estate property practice test

1. A property is assessed at $280,000 and the tax rate is 22 mills. What is the annual tax?

2. An agent signs a contract to sell real property on behalf of the owner. Under MCA 28-2-903, for the contract to bind the owner:

3. An owner of lakefront property holds:

4. A deed that conveys only whatever interest the grantor has, with no warranties, is a:

5. A property manager owes fiduciary duties primarily to the:

6. An unlicensed person holds a power of attorney and sells property for an out-of-state owner once, without a fee. Later he begins doing this regularly for several owners for a fee. Which statement is correct?

7. The periodic report a property manager gives the owner showing rents and other income collected and expenses paid for the period is the:

8. Under Montana's Small Tract Financing Act, a trust indenture may be used to secure property of not more than:

9. A life estate is measured by:

10. Recording a deed in the county records primarily serves to:

11. Which item would most likely be considered personal property rather than a fixture?

12. A licensee may manage property for an owner for a fee only if there is:

13. A special warranty deed warrants title only against defects that:

14. A commercial property has potential gross income of $240,000 and an 8% vacancy allowance. Using a gross income multiplier of 6, what is the estimated value?

15. In a deed, the party conveying title is the and the party receiving title is the .

16. A neighbor's new garage extends two feet over the property line. This is an:

17. Under Board rules, a Montana licensee who contacts an owner seeking information about the owner's property must:

18. Which person may sell Montana real estate for another without a real estate license?

19. Marketable title means title that is:

20. In real estate, the accessibility requirements of the Americans with Disabilities Act apply mainly to:

21. Which statement correctly describes a Montana seller agent's duty to a buyer regarding property condition?

22. Under Board rule, every Montana real estate advertisement must:

23. Under Montana's Unit Ownership Act, an amendment to a condominium's bylaws requires approval of:

24. A Montana salesperson wants to buy a property she has listed for a client. Which arrangement is prohibited by Board rule?

25. When must Montana's statutory radon disclosure statement be provided in the sale of inhabitable property?

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